Author Archives: Michela A.

Commitments

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Commitments

Commitments (or remedies) in the European Union Law

Concept of Commitments (or remedies) provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Proposal by the parties to a () concentration to modify their origi-nally notified project within a specified period (for example, by divest-ing a business or assets). Such commitments must address the competition concerns raised by the Commission and restore compe-tition in the relevant product and geographic markets. They can form the basis for the Commission's clearance of the notified concentra-tion. The Commission may attach () conditions and/or () obliga-tions to its clearance decision, so as to ensure compliance with the commitments offered.

A similar approach is applied by the Commission in procedures aimed at clearing ( Negative clearance) or exempting notified agreements ( Individual exemption), as well as in proceedings dealing with the () abuse of a dominant position.

(See: Articles 6(2) and 8(2) of the merger regulation; Commission notice on

Substitutability

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Substitutability

Substitutability in the European Union Law

Concept of Substitutability provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Measure of the extent to which products may be seen as inter-changeable from the viewpoint of producers or consumers. A firm's pricing policy for a specific product is disciplined if consumers have the possibility to buy another product, which they judge as being equivalent by its nature, use and/or price (demand-side substitution). Additional competitive constraint on the firm may stem from produc-ers of other products capable of switching their production without delay towards the product in question at negligible cost and willing to enter into competition on the market segment concerned (supply-side substitution). Product substitutability is an important element in defining the relevant product market ( Relevant market).

Actual competitor

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Actual competitor

Actual competitor in the European Union Law

Concept of Actual competitor provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Firm which is either currently active on the same relevant market as the company under investigation, or which is able to switch produc-tion to the relevant products and market them in the short term without incurring significant additional costs or risks in response to a small and permanent increase in relative prices (immediate supply-side substitutability).

(See: Commission notice on the definition of the relevant market for the purposes of Community competition law (OJ C 372, 9.12.1997, p. 5).)

Advisory committee

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Advisory committee

Advisory committee in the European Union Law

Concept of Advisory committee provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Committee composed of representatives of the Member States which is consulted by the Commission in antitrust and merger cases where such a consultation is foreseen. A preliminary draft decision by the Commission is submitted to, and discussed with, the advisory committee in question. The advisory committee issues an opinion, which shall be taken into account in the final Commission decision.

(See: Article 10 of Regulation No 17 and Article 19 of the merger regulation.)

Passive sales

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Passive sales

Passive sales in the European Union Law

Concept of Passive sales provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Sales in response to unsolicited requests from individual customers, including delivery of goods or services to such customers. Sales generated by general advertising or promotion in the media or on the Internet that reaches customers in other distributors' exclusive terri-tories or customer groups, but is at the same time a reasonable way to reach customers outside those territories or customer groups (for instance, in non-exclusive territories or in one's own territory), are normally considered passive. Restrictions on passive sales in vertical agreements are hard-core restrictions and fall outside the Commission's block exemption regulation on vertical restraints.

(See: Commission Regulation 2790/99 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices (OJ L 336, 22.12.1999); Commission notice — guidelines on vertical restraints (OJ C 291, 13.10.2000).)

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  • Active sales

Undertaking

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Undertaking

Undertaking in the European Union Law

Concept of Undertaking provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): For the purpose of EU antitrust law, any entity engaged in an economic activity, that is, an activity consisting in offering goods or services on a given market, regardless of its legal status and the way in which it is financed, is considered an undertaking. To qualify, no intention to earn profits is required, nor are public bodies by defini-tion excluded. The rules governing concentrations speak of 'undertakings concerned', that is, the direct participants in a merger or in the acqui-sition of control.

(See for details: Commission notice on the concept of undertakings concerned (OJ C 66, 2.3.1998).)

Predatory pricing

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Predatory pricing

Predatory pricing in the European Union Law

Concept of Predatory pricing provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): A (deliberate) strategy, usually by a dominant firm, of driving competi-tors out of the market by setting prices below production costs. If the predator succeeds in driving existing competitors out of the market and in deterring the future entry of new firms, he can subsequently raise prices and earn higher profits. Predatory pricing by dominant firms is prohibited by EU competition law as () abuse of a () dominant position. Prices set below average variable costs can be presumed to be predatory, because they have no other economic rationale than to eliminate competitors, since it would otherwise be more rational not to produce and sell a product that cannot be priced above average variable cost. Where prices are set below average total (but above variable) costs, some additional elements proving the predator's intention need to be established in order to qualify them as predatory, given that other commercial considerations, like a need to clear stocks, may lie at the heart of the pricing policy.

Extra-territoriality

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Extra-territoriality

Extra-territoriality in the European Union Law

Concept of Extra-territoriality provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Term normally used to describe the exercise by a sovereign State of jurisdiction over foreigners in respect of acts done outside the borders of that State. One could say that — in a very broad sense — the EU applies its competition rules in an extra-territorial manner when it makes use of the () effects doctrine.

State measure

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State measure

State measure in the European Union Law

Concept of State measure provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Law, ministerial decree, decision or other administrative act adopted by a Member State. A Member State's omission to act may also constitute a measure. The Commission may start () infringement proceedings if State measures, taken in relation to () public under-takings and undertakings to which Member States grant special or exclusive rights, contravene EU competition law.

EEA

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EEA

EEA in the European Union Law

Concept of EEA provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): EEA stands for European Economic Area. The EEA agreement, to which all EU Member States and the EFTA members Iceland, Liechtenstein and Norway are parties, entered into force on 1 January 1994. The objective of the agreement is to establish a dynamic and homogeneous European Economic Area, based in substance on common rules and equal conditions of competition. Formally, two separate legal systems coexist within the EEA: the EEA agreement is applied when trade between EFTA members and the Community or between EFTA States is affected; Community law when trade between EU Member States is affected. The EEA agreement is applied both by the European Commission and by the EFTA Surveillance Authority ( ESA).

The division of jurisdiction and a framework for cooperation between the Commission and ESA are laid down in the agreement.

(See: Decision of the Council and the Commission of 13 December 1993 on the conclusion of the agreement on the European Economic Area between the European Communities, their Member States and the Republic of Austria, the Republic of Finland, the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway, the Kingdom of Sweden and the Swiss Confederation (94/1/ECSC, EC) (OJ L 1, 3.1.1994), as amended following the non-ratification of the EEA agreement by Switzerland.)